It has been about a month since the last earnings report for Flir Systems . Shares have added about 13.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Flir Systems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FLIR Systems Q3 Earnings Beat, Revenues Down Y/Y
FLIR Systems Inc.’s third-quarter 2020 adjusted earnings of 64 cents per share surpassed the Zacks Consensus Estimate of 56 cents by 14.3%. Also, the reported figure increased 10.3% from 58 cents in the prior-year quarter.
The company reported GAAP earnings of 46 cents per share, in line with the year-ago quarter’s earnings.
Operational Performance
FLIR Systems’ revenues declined 1% year over year to $466.4 million in the reported quarter. Moreover, the top line missed the Zacks Consensus Estimate of $471 million by 1%.
Total backlog at the end of the third quarter increased 10.9% to $898.7 million on a year-over-year basis.
The company’s total operating expenses declined 8.4% year over year to $142.3 million.
Adjusted operating income came in at $86.6 million compared with the operating income of $74.4 million in the third quarter of 2019.
Segment Update
Segment-wise, quarterly revenues in the Industrial Technologies segment were $281.1 million, representing an increase of 9% from the prior-year quarter. The increase was primarily attributable to heightened demand for EST solutions as a result of the COVID-19 pandemic and an increase in maritime product sales.
The Industrial Technologies segment’s operating income was $87.7 million compared with $63.7 million in the prior-year quarter. Segment operating margin increased to 31.2% from 24.7% in the prior-year quarter.
Revenues in the Defense Technologies segment were $181.3 million, which decreased 13.1% from the prior-year quarter. The decrease was primarily attributable to shipment timing and the completion of certain contracts that contributed to revenues in the prior-year quarter.
The Defense Technologies segment’s operating income was $38.8 million compared with $53.8 million in the prior-year quarter. Segment operating margin decreased to 20.9% from 25.2% in the prior-year quarter.
Liquidity & Cash Flow
As of Sep 30, 2020, the company’s cash and cash equivalents were $320 million compared with $284.6 million as of Dec 31, 2019.
Long-term debt totaled $715.2 million, up from $648.4 million as of Dec 31, 2019.
Cash flow from operating activities for the nine months ended Sep 30, 2020, amounted to $196.2 million compared with $276.8 million as of Sep 30, 2019.
Outlook 2020
FLIR Systems updated its financial guidance for 2020. The company currently expects to generate adjusted earnings per share of $2.30-$2.35 compared with the earlier guided range of $2.10-$2.30. Currently, the Zacks Consensus Estimate for 2020 earnings, pegged at $2.21, lies below the company-provided guidance.
The company currently expects to record revenues of $1.80-$1.90 billion compared with the prior guidance range of $1.85-$1.925 billion. The Zacks Consensus Estimate for 2020 revenues, pegged at $1.90 billion, lies above the midpoint of the company’s guidance.
Adjusted operating income margins are expected to be approximately 22.0%, from 20-21%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Flir Systems has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Flir Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Flir Systems (FLIR) Up 13.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Flir Systems . Shares have added about 13.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Flir Systems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FLIR Systems Q3 Earnings Beat, Revenues Down Y/Y
FLIR Systems Inc.’s third-quarter 2020 adjusted earnings of 64 cents per share surpassed the Zacks Consensus Estimate of 56 cents by 14.3%. Also, the reported figure increased 10.3% from 58 cents in the prior-year quarter.
The company reported GAAP earnings of 46 cents per share, in line with the year-ago quarter’s earnings.
Operational Performance
FLIR Systems’ revenues declined 1% year over year to $466.4 million in the reported quarter. Moreover, the top line missed the Zacks Consensus Estimate of $471 million by 1%.
Total backlog at the end of the third quarter increased 10.9% to $898.7 million on a year-over-year basis.
The company’s total operating expenses declined 8.4% year over year to $142.3 million.
Adjusted operating income came in at $86.6 million compared with the operating income of $74.4 million in the third quarter of 2019.
Segment Update
Segment-wise, quarterly revenues in the Industrial Technologies segment were $281.1 million, representing an increase of 9% from the prior-year quarter. The increase was primarily attributable to heightened demand for EST solutions as a result of the COVID-19 pandemic and an increase in maritime product sales.
The Industrial Technologies segment’s operating income was $87.7 million compared with $63.7 million in the prior-year quarter. Segment operating margin increased to 31.2% from 24.7% in the prior-year quarter.
Revenues in the Defense Technologies segment were $181.3 million, which decreased 13.1% from the prior-year quarter. The decrease was primarily attributable to shipment timing and the completion of certain contracts that contributed to revenues in the prior-year quarter.
The Defense Technologies segment’s operating income was $38.8 million compared with $53.8 million in the prior-year quarter. Segment operating margin decreased to 20.9% from 25.2% in the prior-year quarter.
Liquidity & Cash Flow
As of Sep 30, 2020, the company’s cash and cash equivalents were $320 million compared with $284.6 million as of Dec 31, 2019.
Long-term debt totaled $715.2 million, up from $648.4 million as of Dec 31, 2019.
Cash flow from operating activities for the nine months ended Sep 30, 2020, amounted to $196.2 million compared with $276.8 million as of Sep 30, 2019.
Outlook 2020
FLIR Systems updated its financial guidance for 2020. The company currently expects to generate adjusted earnings per share of $2.30-$2.35 compared with the earlier guided range of $2.10-$2.30. Currently, the Zacks Consensus Estimate for 2020 earnings, pegged at $2.21, lies below the company-provided guidance.
The company currently expects to record revenues of $1.80-$1.90 billion compared with the prior guidance range of $1.85-$1.925 billion. The Zacks Consensus Estimate for 2020 revenues, pegged at $1.90 billion, lies above the midpoint of the company’s guidance.
Adjusted operating income margins are expected to be approximately 22.0%, from 20-21%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Flir Systems has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Flir Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.